Maine Injured Workers Ass.
http://www.miwa.org/insuranc.html
Occupational Disease
(The following is quoted from the book "Human
Debris".)
Occupational disease is the insurance industry's bugaboo. The dark
revelation that more than 100,000 Americans are dying each year from this
cause has frightened insurance executives. They are apprehensive about the
increasing awareness of the contribution of the work environment to the
development of many diseases. Substances that we regarded as safe are now
known to cause cancer. Heart disease once thought to be strictly
non-work-related, is now being linked to stresses at work. If workers'
compensation insurers had to pay for any large percentage of the appalling
toll of occupational disease, their margins of profit would be seriously
affected.
Since no more than 5% of those suffering from
occupational disease now receive workers' compensation for their condition,
the burden of caring for these disabled men and women has fallen on the
public. Social Security, welfare, food stamps, Medicare, and Medicaid take
care of the people who should be the workers' compensation insurance
industry's charge. In 1980 a total of $1.9 billion, or 13% of the Social
Security Disability Insurance (SSDI) Trust Fund of $15 billion, was paid to
victims of occupational disease. For the same year. SSDI paid out $500
million for medical care for job-related diseases. Thus, the Social Security
system put out $2.4 billion for occupational disease in 1980. This
represents money that the workers' compensation insurance industry did not
have to pay, although it collects premiums and receives the protection of
law under the theory that it and it alone is the appropriate mechanism for
compensating workers who have been injured or made sick on the job.
As yet, few occupational-disease claims are filed;
fewer still result in compensation. This is OK with insurance industry
leaders. Their response to the problem of occupational disease is to deny
its existence.
The insurance industry point of view on occupational
disease was summed up by John A. Antonakes, vice-president of Liberty
Mutual, the largest workers' compensation insurer in the United States. At a
seminar on occupational disease sponsored by the National Council on
Compensation Insurance, Antonakes said that there were three categories of
occupational disease.
1. The
commonly accepted occupational diseases such as metal poisoning, silicosis,
asbestosis, byssinsis, etc.
2. Ordinary diseases of life such as asthma, emphysema, bronchitis, hearing
loss, heart disease, emotional illness.
3. Cumulative injury.
He says that a claim for the first category amount to
no more than 3% of all workers' compensation claims and are not expected to
increase. As for the second and third categories, if all the potential
claims in those groups were compensated, "the costs could be staggering."
But in his view, these diseases and resulting disability should not be taken
care of by workers' compensation.
The Liberty Mutual executive illustrated his points
with the example of byssinosis due to cotton-dust exposure. The problem of
the occupational disease, like others, is vastly overstated. He says that
the total worker population exposed to cotton dust is 35,000. Of these,
about 3500 are at risk of suffering byssinosis to the extent that their
working capacity will be affected. Antonakes presented these figures to an
audience that wanted to believe him, fellow insurance executives mainly. His
numbers are in glaring contrast to those maintained by the federal
government's National Institute of Occupational Safety and Health. NIOSH
estimates that 300,000 workers are significantly exposed to cotton dust and
many more are potentially at risk. At least 35,000 workers are permanently
and totally disabled due to byssinosis, and 800 more become totally disabled
each year.
As for "ordinary diseases of life" and cumulative
injury, Antonakes implies that these should not be compensable. He warned
that "If public policy requires that compensation be provided to diseased
workers whose employment had only a peripheral influence over the disease
itself, then we would have serious doubts as to the capacity of the workers'
compensation system as presently structured to handle the potential flood of
claims."
The key word in this statement is "peripheral."
Antonakes is raising the issue of "arising out of and in the course of
employment," the "AOE/COE"test that is the main issue in litigation of
occupational-disease cases. The public-policy issue is whether workers'
compensation should cover diseases that are partly caused by work - should
such diseases be deemed AOE/COE? Antonakes believes, like almost all
insurance people, that they should not be compensable. The worker who smokes
whose probability of developing lung cancer increased fourfold by working
around asbestos would not agree.
Antonakes expresses the point of view of most workers'
compensation insurance executives, content with the old way of doing things
and no wanting to change to keep pace with a changing world. The absurdly
low figures of people at risk of byssinosis, the firm refusal to consider
modifying the compensation system to take care of "ordinary diseases of
life" that are actually caused by work these are signs of a kind of denial
that strangely parallels the denial or workers who have been exposed to
occupational-health hazards. Hoping for the best, compensation insurers take
comfort from the fact that past occupational-disease claims have been few
and the present rules of compensation litigation make it very difficult for
diseased workers to win a claim.
Antonakes' comfortable and self-serving view of the
occupational-disease question is implicitly refuted by the leading expert on
workers' compensation it pertains to occupational disease. Peter Barth, in
his Workers' compensation and Work-Related Illnesses and Disease,
says that the estimates of 100,000 occupational-disease-caused deaths per
year may be too high or too low.* No one knows what a really accurate number
would be, because there is no agreement about the definition of occupational
disease. But, he says, "in absolute terms the occupational-disease problem
is a large one,' and "the evidence suggests that the workers' compensation
system in the united States is dealing with very few cases of occupational
disease."
Another of the small group of experts in workers'
compensation believe that there already is a crisis in the workers'
compensation system as a result of occupational disease. John F. Burton,
Jr., former chairman of the National Commission on State Workmens'
Compensation Laws, declared at the same National Council on Compensation
Insurance seminar where Antonakes spoke that occupational-disease cases are
already inundating workers' compensation. Back strains and sprains, which
accounted for 20% of workers' compensation claims in 1980, have
traditionally been classified as traumatic injuries rather than occupation
disease. But, Burton says, most bad backs are actually caused by disease,
rather than by traumatic injury. When workers' compensation case-law
developed, back injuries were mainly the result of a trauma and resulted in
a herniated disc. Now there are at least three other types of back problem
that result in disability and are the subject of workers' compensation
claims. These other conditions are found in the general population and are
virtually impossible to link to a specific event, such as an accident at
work. Burton says, "...while it is apparent that a set of legal rules can be
superimposed on back cases to distinguish those that are work-related from
those that are not, we ought to recognize that from a medical of scientific
standpoint those rules re pure hokum."
Burton's conclusion is that in order for workers'
compensation to properly compensate occupational disease, it must do away
with the work-relatedness test. The AOE/COE issue should simply be
eliminated from consideration in occupational-disease cases. In a sense,
Burton confirms Antonakes when the latter says that workers' compensation
"as it is presently structured" cannot handle the "potential flood of
claims" due to occupational disease. To remove the work relatedness test is
to radically change workers' compensation, to restructure it in a basic way.
Perhaps that's just what is needed.
*Peter S. Barth
with H. Allen Hunt. Workers' Compensation and Work-Related Illnesses and
Diseases. First edition. Cambridge, MA: MIT Press, 1980, p.255.
Litigation
Most occupational-disease cases are litigated. These
claims are usually begun by a worker's lawyer filing an application with at
the state agency, asking it to adjudicate the claim. Insurance executives
point to this circumstance to show that occupational-disease claims are an
unwarranted burden on the system. In fact, the reason for the great amount
of litigation is that insurance carriers will not pay reasonable
compensation without being ordered to by the state agency.
An important reason for carriers' intransigence is that
in any particular claim there are usually two or more insurers involved.
Workers' compensation coverage, like other insurance coverage, is for
limited periods. An employer may have more than one compensation insurer
over a period of years or an employee may work for a number of employers,
each having a different insurance carrier. A carrier is responsible to pay
workers' compensation only for injuries occurring during the period it
covered a particular company and its employees. But occupation disease often
takes years to develop. Thus, many insurers may potentially be responsible
for a single claim. Insurance carriers make it a point of honor never to pay
any part of a claim that may be the responsibility of another carrier.
Injured workers come and go but competitors are always there. Reputations of
claims managers and insurance company lawyers are made or lost depending on
cases that involve other carriers. A good reputation, given the values of
the industry, means you don't pay out a dime more than you absolutely have
to. It is common for litigation to go on for years simply over the issue of
which carrier is to pay the claim. All parties may agree that the worker
should be compensated, but he or she just has to wait until this issue is
finally settled.
The painfully slow nature of workers' compensation
litigation works to the benefit of the insurance carrier. Delay is the
friend of the carrier. There are several reasons for this.
Insurance companies earn a good part of their income from investing their
reserves. The longer they hold on to their money, the richer they get. If a
worker is disable in 1979, but does not get compensation until 1981, not an
unusual circumstance, the insurance carrier has had the use of two years'
worth of his or her compensation in a high-interest investment market. Also,
in most states benefits are determined as of the day of the accident,
regardless of when payment is actually made. The carrier that delays payment
through litigation is rewarded by being allowed to pay off in dollars that
are worth less than they were on the date they should have been paid.
Penalties for late payment are usually minuscule and hard for the worker to
collect.In California, the penalty for late payment is a 10% augmentation of
the particular type of benefit unreasonably delayed. The worker has the
burden of proving that the delay was unreasonable. Most workers'
compensation lawyers in that state don't even bother to try for this
penalty. "Judges" hate to award it - it makes the insurance companies angry.
A more sinister advantage for delay involves death
benefits. The worker who has contracted asbestosis or cancer as a result of
exposure at work cost less dead than alive. In most states, if a worker can
prove his or her condition compensable, the insurance carrier has to pay
much more in medical bills and total disability payments than in the death
benefits. It is cheaper for a carrier to litigate a case for years, if need
be, until the worker dies than to pay while he or she is still alive. Death
benefits are payable only to a dependent spouse and children; other next of
kin are not entitled to them.If a single man or woman, or a widow or widower
or divorced person with grown children, is killed on the job, the carrier is
responsible only for a small burial allowance. these workers are
bargain-basement specials for insurers; all they have to pay is a burial
allowance. In 1981 in New York this wa $1250; in California $1500.
Workers' compensation cases, unlike ordinary negligence
cases, do not "survive" the death of the worker inmost states. If a person
is killed off the job through someone else's negligence, his heirs, whether
dependents or not, could collect most of the damages the victim could have
collected had he survived. In addition many states allow suits to be brought
by next of kin for "wrongful death." The disparity between workers'
compensation, with its paltry death benefits, and the law of negligence as
it has developed in this century is a commentary on the legal ghettoization
of the American worker in the workers' compensation system.
Workers' compensation was designed as a no-fault system
in order to eliminate litigation and to ensure prompt payment of benefits.
It was made the "exclusive remedy" on the assumption that it would
compensate all work-related injuries and diseases if most all at the
beginning, then eventually. But, as we've just seen, the system is rife with
litigation. Injuries and diseases that are caused by work are not being
compensated. Delays are robbing injured workers of the value of their
benefits as well as hope for a new beginning.
Meanwhile, rates are going up and employers are
becoming increasingly restive. Every increase in benefits brings with it an
increase in rates, in a seemingly classic example of the inflationary
spiral. Yet benefits are still too low. And too few work-related
disabilities are being compensated, especially occupational-disease cases.
There just doesn't seem to be enough money in the workers' compensation
system to take care of all the people who should be taken care of.
When there isn't enough money to run a social-benefit
program the way it has been run in the past, there are two basic avenues of
change. They are not mutually exclusive, but generally those who are
interested in one approach are not interested in either . One approach is to
focus on benefits and attempt to restrict them in someway. The other
approach is to change the method of financing to provide more money for
current benefits and for the possibility of expansion of benefits in the
future if necessary.
The insurance industry has attempted to effect "reform"
by restricting benefits. Insurance spokesmen seem to have convinced
themselves, and are trying to convince others, that all the problems of
workers' communications are the result of wildly liberal "judges" giving
away huge sums of money to undeserving cheats at the insistence of
unscrupulous plaintiffs' lawyers. It is this nefarious group of
troublemakers, insurers allege, that is plundering the system.
These arguments obscure the underlying reality of
workers' compensation. It is a system controlled in most details by the
insurers themselves. Workers have only the right to contest a denial of
benefits, but insurers hold the money and the power. Employers, particularly
small ones, have no right at all. They must buy compensation insurance at
rates prescribed by law.
Some of these abuses that insurance people talk about
do happen. Occasionally someone fakes an injury or a compensation "judge"
makes an award of unwarranted liberality. But it is not possible to believe
that great numbers of American workers are attempting to freeload off an
overgenerous workers' compensation system, just as it is incredible that
there are great numbers of too-liberal "judges."
The financial problems of workers' compensation don't
really have to do with benefits at all. It's the other end of the system
that has to be examined to explain why premiums are so high and benefits so
low. It's not the payout to the workers that is causing the crisis, it is
the sheer inefficiency of a system that allows insurers to take billions
from employers and give relatively little in return. For the truth is not
that injured workers are getting too much but that they are getting much too
little.
Electroplater
The problem of toxic chemicals in the workplace is fast
becoming the number-one occupational-health hazard in the United States. So
many chemicals are being used for so many industrial processes, with so
little control over their use, that it is little wonder that more and more
workers are becoming sick due to exposure. There are many possible health
effects of exposure to toxic chemicals; electroplaters, for example, are
subject to no less than thirteen identifiable occupational diseases.
The medical profession has done little to dispel this
denial. Very few doctors have the knowledge or motivation to properly
diagnose occupational disease. Doctors tend to minimize what they don't
understand.
Smith had symptoms years before becoming totally
disabled. She was told by her family doctor that she had "bronchitis." It
may well be that a family doctor in the denim capital of the world ought to
be able to spot a case of byssinosis. This one apparently couldn't. When
Smith came back to him with her diagnosis from a doctor in Durham, the
family doctor told her that he himself didn't know anything about brown
lung.
In not being able to diagnose Smith's condition as an
occupational disease, Smith's doctor was typical of general practitioners
across the country. Most of them are not familiar with even the most
widespread occupational diseases. They rarely take a detailed occupational
history from a patient. Their training has not prepared them to deal with
this major health problem. American medical schools practically ignore
occupational medicine. The average medical student gets one hour of
instruction in this field in his entire four hears in medical school.
Family doctors in urban areas are even more unlikely to
diagnose an occupational disease than a doctor in a one-industry town like
Erwin. It's unlikely that a city doctor will examine more than one or two
patients who display similar symptoms due to similar exposure at work. Also,
the exposure might have been twenty years before and 2000 miles away.
Large factories or mills always have in-house doctors
or nurses. One would think that these medical professionals would be able to
identify a disease characteristic of the plant's operation; they must run
across it fairly often.
When doctors fail to diagnose an occupational disease
there are legal as well as medical consequences. Not only does the worker
not get proper treatment, if indeed there is any effective treatment, but he
or she will not receive workers' compensation. In order to qualify for
compensation, a worker must have a doctor's diagnosis of an occupational
disease, a diagnosis that satisfies the workers' compensation requirement
that an illness be work-related. Betty Smith could never have received even
the small amount of compensation she did get while the diagnosis was
"bronchitis." Luckily for Smith, organizers of the Brown Lung Association
referred her to a pulmonary specialist in the university of Durham. This
doctor finally gave her the proper diagnosis, ten years after her first
symptoms.
Doctors are a major bottleneck in the workers'
compensation system. When the law was changed in North Carolina and
byssinosis became compensable, there was not the flood of claims that one
might have expected. Only a few hundred workers got compensation for
byssinosis between 19634 ane1979. There were only a few doctors in the state
who could diagnose the disease and feel competent to state unequivocally
that a worker's disability was caused by exposure to cotton dust at work.
John Vandyne's case was a little different. The company
doctors who examined him knew that he was developing asbestosis but did not
warn him away from the work which they saw was harming him. Johms Manville's
behavior in suppressing these findings was so egregious that the asbestos
company's California employees were allowed by the Supreme Court to sue
their employer despite the heretofore insurmountable bar of the
exclusive-remedy provision of the workers' compensation laws.
Richardson's experience was unusual among workers suffering from
occupational disease. He found his way to a clinic that had been specially
created to diagnose occupational disease and treat its victims. There are
only five or six such clinics in the country, but they have had a salutary
influence on other doctors int their localities, sensitizing them to the
health hazards found in the work place. These clinics provide appropriate
treatment to workers made sick on the job and give them some chance to
obtain workers' compensation.
We look at what happened to people who worked around
asbestos, we have good reason to fear the worst.
Occupational disease is fast becoming one of the
nation's top health problems. There are at least two reasons for this. The
first is that new technology is filling the American workplace with more
untested and dangerous substances than ever before. Besides radiation, those
dangers are well documented, there are thousands of new chemicals being
invented every year. many of these are highly toxic. The other reason
occupational disease is taken so seriously by public health experts is that
medical science is beginning to identify as industrially caused much disease
which was up to now thought to be nonindustrial. Many types of cancer, lung
disease, nervous system disorders, and various other ailments are now
suspected of being caused by conditions at work.
Public health problems, like all of society's troubles,
cannot be solved until they are first recognized as "problems." While this
recognition does not ensure that conditions will in fact get better, it is
an absolutely necessary first step in the progress toward reform.
Only when the American public began to believe that
there was an "environmental problem," that our air and water were becoming
so polluted as to be a menace to our health and that of our children, did
political and social change begin to occur.
Working conditions can be greatly improved for millions
of people. Not made risk-free, of course, but as healthy as modern
technology and human ingenuity can make them. Profound changes will occur
when the issue of workplace health and safety becomes a major political
issue, one that draws national media attention and delivers large numbers of
votes to politicians bright enough to champion the cause.
There are many other stories of occupational illness
among the 95% of those afflicted with it who do not receive workers'
compensation; enough stories to fill many books: an encyclopedia of
suffering.
One of the most dangerous substances created by man is
dioxin. if it is popularly known, it is because it was the most toxic
ingredient in Agent Orange, the herbicide used to defoliate large areas of
Vietnam. Also, there was a great deal of media attention to an explosion in
a dioxin-manufacturing plant in Seveso, Italy, in 1977, which contaminated a
large area. The effect of dioxin represents a summary of the more serious
signs of a number of occupational diseases, particularly in the chemical and
atomic industries: chloracne (a skin rash that looks like a bad case of acne
and can last for years); liver damage; nervous system and vision impairment;
spontaneous abortion; birth defects; abnormal function and derangement of
the immune system; and cancer-causing potential - a catalogue of nightmares
that is by no means exhaustive.
The frighteningly futuristic world of occupational
disease coexists with the old-fashioned system of workers' compensation. The
problems of the twenty-first century are being addressed with solutions from
the nineteenth. It's no wonder that few occupational disease cases are
compensated and that workers' compensation does nothing to encourage
employers to maintain healthy workplaces.
There were no signs at the mill warning of the health
problems associated with cotton dust. Despite the fact that byssinosis has
been a known occupational disease for almost a hundred years, despite the
fact that Great Britain passed a byssinosis compensation act in 1940,
despite the presence of a union in the mill since the early 40's, it was
known in Erwin, North Carolina, that there was a disease caused by cotton
dust, that it was called byssinosis, and that it could disable and kill.
After the passage of OSHA, byssinosis became a national issue and news
filtered down to Erwin through organizers of the Brown Lung Association.
The Insurance Cartel
While the workers' compensation system cannot better
the lives of most workers hurt on the job, it is very effective in making
rich insurance companies richer. Immune from antitrust laws, the insurance
industry has organized itself into a cartel that virtually dictates to
employers what they shall pay in workers' compensation insurance and to
workers what they shall receive in benefits. From the cradle of rates to the
grave of benefits, all is quietly managed by a small group of insurance
executives. Operating in welcome obscurity, they accumulate billions of
dollars each year.
Workers' compensation is an enormously expensive way to
take care of injured workers. Out of every dollar paid in premiums, no more
than sixty-five cents is paid out in benefits. In some stated almost fifty
cents of each premium dollar is retained by the insurers. By contrast, the
Social Security Administration uses only one and a half cents for
administrative expenses for every dollar received in Social Security taxes.
The Cartel
The insurance industry is a cartel in the classic
sense. Immune by a special federal law from antitrust laws and federal
regulation, it has grown into one of the most sophisticated and powerful
economic and political forces in our society. Organized and cooperative,
American workers' compensation insurers have come to dominate the
governmental forces meant to regulate them.
On the fifty-first floor of a skyscraper overlooking
midtown Manhattan are the offices of the cartel's nerve center. The National
Council on Compensation Insurance decides what workers' compensation
insurance will cost in most of the United 'States., It has a low profile,
and no doubt wishes to keep it that way, for if its real subject of public
scrutiny, and embarrassing questions might be asked. Governed by committees
or representatives of the insurance companies that support it, the National
Council makes rates for thirty two states and provides critical technical
assistance to local rate-making organizations in twelve more jurisdictions.
More than 1100 people work for the National Council, which provides services
to more than 600 member or subscriber insurance companies.
While all government regulation of insurance is done at
the state level, and the federal government regulation of insurance is done
at the state level, and the federal government is forbidden by law to
regulate it, the insurance industry is tightly organized on a national
basis. Few state governments are a match for the technical expertise of the
National Council or the political muscle of the insurance-industry trade
groups. When the National Council Proposes rates based on national profit
and loss data, most state insurance commissioners have little choice but to
accept its conclusions, since their resources are pitiful in comparison with
those of the National Council.
California and a few other states have different
organizations that serve the same function as the National Council and are
also creatures of the insurance industry. The California Insurance Rating
Bureau, a semi governmental body run by private insurers, has a monopoly on
recommendation of rates to the state insurance commissioner.
Workers' compensation insurance is compulsory and its
rates are noncompetitive, particularly to small business that does not
benefit from experience rating or retrospective-rating plans. The rates are
set by the industry itself and are rarely challenged by relatively weak
state insurance commissioners. And the rates produce billions more each year
than is needed to pay claims and operate the system.
There are three types of workers' compensation
carriers, two privately owned and on state owned. There are stock companies,
mutuals, and state funds. Stock companies and mutuals write other lines of
insurance as well as compensation. State funds are unique to workers'
compensation.
When workers' compensation was introduced, some states
found that private insurers were so rapacious that many employers would be
ruined if they had to pay the premiums that were demanded. Eighteen states
organized their own insurance companies, called "state funds", to provide
insurance at reasonable rates. Of these, six are "exclusive state funds", in
six states only the state fund may sell workers' compensation insurance. The
other twelve state funds compete with private insurers and operate for the
most part like them. The largest exclusive state funds are in Ohio,
Washington, and West Virginia. Of the competitive state funds, California's
is by far the largest. State funds are nonprofit, return if their excess to
their policyholders. Their degree of efficiency and share of the market vary
greatly from state to state, depending essentially on the role determined
for them by the state legislature.(End of quote)
The e-mail address for the Maine Injured Workers
Association is:
miwa@miwa.org
The mailing address for the Maine Injured Workers
Association is:
P.O. Box 85
West Paris, Maine 04289-0085
The web site address for the Maine Injured
Workers Association is:
http://www.miwa.org
|
Email:
|
|
